Who Needs Stinking Rental Car Insurance

Having moved to the Sunshine State when I was 12, I never had the opportunity to master driving on ice.  Truthfully, I’m not sure anyone ever truly masters it.  A few years ago, during our January “so the kids could see snow” trip to my wife Beth’s home state of Michigan, I had the chance to hone my driving skills on sleet, snow and black ice.  Hockey Town was having one of their worst snowfalls in decades.  Due to budget cutbacks, particularly around Detroit, many of the roads and exits were not plowed.  It was truly a winter wonderland, if you get my drift.

We were making one of our regular trips to buy our two week supply of snacks for our three day hotel stay and pulled into the Kroger parking lot.  I quickly learned that Kroger is the Michigan equivalent, and archenemy of, Florida’s Publix.  As I pulled into the parking space, I gently braked and the rental car kept sliding, and sliding, and sliding.  It was only a few feet but since it was happening in slow motion, it felt like the length of a football field.  I had a flashback to my childhood when I would slide down the hills of Crocheron Park on my red sled, except this was a 3,000 pound Toyota and there was a yellow metal pole directly in front of us.  I turned the wheel and the pole caught the driver’s side front fender and the car finally came to a stop.  It was the first fender bender that I ever had in a rental car.

My first thought was what would happen to my insurance rates?  I had waived the rental car insurance like I always did because I carry collision and comprehensive on my auto policy and I knew it would cover me when renting a car.  I turned to Beth in the passenger seat and complained in a extremely frustrated tone that our rates could skyrocket, she calmly said “everybody knows that” just like the TV commercial.

There are five circumstances that ought to have you purchase the rental car insurance.  Keep in mind though, it is expensive and it’s not uncommon for the daily insurance rate to equal the daily car rental rate.  Here are the five:

  1. If you don’t have car insurance
  2. If you have car insurance with a very high deductible or you don’t carry collision or comprehensive coverage
  3. If you are traveling overseas
  4. If you are worried about your rates being impacted by a claim
  5. You want peace of mind at any cost

Within a few days of returning to Florida, I was contacted by the car rental company.  The good news was that the damage was minor.  The bad news was that they would charge me for each day the car was “out of service” and in the repair shop.  It was like I was renting the car, but not driving it. While this made perfect business sense to me, it was not something that I had ever previously thought about.  The total claim came out to around $875.  I contact my credit card company and they wanted to know what the deductible was on my auto policy.  It was $500 and they indicated that they would cover that amount.  If I wanted to have anything covered above that amount, I would have to file a claim with my insurance company.  I did not want to take the chance of having my rates jump, so I did not contact my insurance company and the credit card company indicated that they would not either. I simply paid the extra $375 out of pocket.  That stop at Kroger cost a lot more than a bag of pretzels, but at least nobody was hurt and the chicken dinner at Zehnder’s later that night made it all good.

Blog Tip:  Before you rent a car on your summer vacation, contact your auto policy carrier and ask them about your coverage.  Next, contact your credit card company and confirm that you are covered through them if you use their card to charge the car rental.  If you completely disagree with the idea of being without the car rental insurance coverage and want to buy it at all cost, at minimum, have the car rental company explain to you in detail the coverage that you are buying.  Keep in mind, there are different coverages and they are NOT all the same.  In summary, the four main types of coverage are Loss Damage Waiver (LDW), Supplemental Liability Insurance (SLI), Personal Accident Insurance (PAI) and Personal Effects Coverage (PEC).  For additional information, click here

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